Israel appears convinced that at least low-level diplomatic relations with the Soviet Union are on the way to being restored. In the strongest indication of this view to date, a senior Foreign Ministry official said late last week that he expects some members of a soon-to-arrive Soviet consular team to stay indefinitely.

``This is a way for the Soviets to install themselves here under the initial pretext of attending to consular matters,'' said the Israeli official, who spoke on condition that he not be named. ``They are not normalizing relations between Israel and the Soviet Union, but they are creating a nucleus of a presence.''

Under Soviet leader Mikhail Gorbachev, however, ``the Soviets have been talking to us, all over the world, more than they ever have in the past,'' the Foreign Ministry official said.

This increased contact, in Europe and the United States, has produced mixed results.

A first meeting between low-level Soviet and Israeli teams in Helsinki last August lasted only 90 minutes. Israel had put the question of Soviet Jewry at the top of its agenda and demanded that Israel be allowed to visit Moscow in return for permiting a Soviet consular delegation to visit here.

The Soviets made it clear they were not to be bullied by Israel and postponed for several months the planned consular visit. Eventually, Israeli officials backed down on the demand for reciprocity, saying now that they ``expect'' visas will be granted an Israeli delegation should Israel decide to send one to the Soviet Union.

Since Helsinki, however, the Soviets have substantially increased the number of exit visas granted to Soviet Jews and released almost all ``prisoners of Zion.'' Mr. Gorbachev reaffirmed publicly the Soviet Union's acceptance of Israel within its pre-1967 boundaries in a toast to Syrian President Hafez Assad during Mr. Assad's official visit to Moscow earlier this year. Israel's dream of mass direct flights of Soviet Jews to Israel, however, has not been realized.

When he was still prime minister, Foreign Minister Shimon Peres named the restoration of full diplomatic ties with Israel and the issuing of exit visas to thousands of Soviet Jews as the conditions for Soviet participation in a Middle East peace conference. The Soviets have strongly supported the idea of a conference under UN auspices, with joint Soviet-US participation.

Privately, many Israeli officials who would like to see a resumption of Israeli-Soviet ties view Mr. Peres's issuing of conditions as a mistake; the Soviets saw them as an insult.

One of many hurdles in the way of convening a Mideast conference is finding a graceful way around the conditions laid down by Israel and accepted by the US, these officials say.

Meanwhile, the Soviets are expected to arrive here within two weeks.

The 10-member team is ``an unusually large one,'' the Foreign Ministry official said, for what ostensibly is an opportunity for the Soviets to deal with their extensive land holdings here and to handle problems that have arisen for the handful of Soviet citizens living in Israel.

``It's a kind of test they [the Soviets] are carrying out,'' the official said. ``They want to see what the atmosphere here is like, how hostile it will be to the Soviets.''